Implications or determining permanent impairment - High Court decision in Fellowes v MRCC
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Transcript of Implications or determining permanent impairment - High Court decision in Fellowes v MRCC
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7/31/2019 Implications or determining permanent impairment - High Court decision in Fellowes v MRCC
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AUSTRALIAS SAFEST WORKPLACES
Jur
isdictionalPol
icyAdviceNo
.2010/02
Safety,
Rehabilita
tionandCom
pensationAct1988
Jurisdictional Policy AdviceNo. 2010/02Safety, Rehabilitation and
Compensation Act 1988High Court decision in Fellowes v MRCCimplications or determining permanent impairment
Purpose
1. This advice is being issued to explain the implications of the decision
made by the High Court of Australia in the case ofFellowes v Military
Rehabilitation & Compensation Commission [2009] HCA 39 (Fellowes).Guidance is included for determining authorities to follow when they
determine liability for an injury which results in permanent impairment.
The relevant part of the Safety, Rehabilitation and Compensation Act
1988(the Act) is Part II, Division 4.
2. In particular, this advice informs and reminds determining authorities
that:
the word impairment appearing in sections 24, 25 and 28 of the
Act bears the meaning given by the denition in subsection 4(1)
of the Act. It is dened in terms of the effect on body parts, bodily
systems or functions, not whole person impairment as describedin Comcares approved1Guide to the Assessment of the Degree of
Impairment(Guide).
when they are applying the Guide to assess the degree of
permanent impairment resulting from a compensable injury, they
need to isolate the permanent impairment resulting from that
particular injury and assess only that impairment.
3. Determining authorities are advised to:
apply the above practice to all permanent impairment claims they
determine on and from 23 September 2009. This is the date that theHigh Court handed down its decision. Determinations made before
that date remain valid. However, if a request for reconsideration
of a determination made before 23 September 2009 is received, it
would be reasonable for the determining authority to apply the new
practice.
1
1 Section 28 of the Act requires Comcare to prepare and issue a Guide to the Assessmentof Degree of Permanent Impairment. This Guide sets out methods of assessment ofpermanent impairment and non-economic loss. It is binding on determining authorities andthe Administrative Appeals Tribunal.
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Background
Ms Robyn Fellowes enlisted in the Australian Army in November 1986. In 1986 she
suffered a work-related injury to her left knee, and in 1987 she suffered a work-related
injury to her right knee. Ms Fellowes claimed compensation for her injuries under the
SRC Act (via the Military Rehabilitation and Compensation Commission [MRCC]). The
MRCC determined that Ms Fellowes suffered a degree of permanent impairment
assessed at 10% as a result of the injury to her left knee and paid her compensation
in respect of the permanent impairment. However, although Ms Fellowes suffered a
degree of permanent impairment assessed at 10% resulting from the right knee injury,
the MRCC determined that under the SRC Act and the Guide it was not liable to pay
compensation for that permanent impairment because it had already compensated
Ms Fellowes for a degree of permanent impairment assessed at 10%.2
4. The majority3 of the High Court decided that the degree of permanent impairment that
Ms Fellowes suffered from a subsequent injury to her right knee should be assessedindependently of the compensation she had already received for a permanent impairment
to her left knee. The High Court took this approach despite both of the permanent
impairments resulting from both of the injuries being assessed under the Limb Function
Lower Limb Table 9.5 in Part 2 of the Guide.
5. In making its decision, the High Court relied on and reinforced the judgment in Comcare
v Canute (2006) HCA 47 (Canute). The judgment made in this case decided that under
subsection 24(5) of the Act there should be a separate assessment of the degree of
permanent impairment resulting from each separate injury suffered by an employee. This
includes sequela injuries (injuries which arise from, occur subsequent to, or are caused by
the initial injury or associated treatment).
6. Ms Fellowes sustained two separate work related injuries that led to two separate losses
of the use of, or damage to, two distinct parts of her body (left and right knees). The High
Court decided that Ms Fellowes was entitled to permanent impairment compensation for
her right knee injury as it met the criterion for 10 per cent degree of impairment under
Table 9.5 (Part 2) of the Guide: can rise to standing position and walk but has difculty with
grades and steps4. This was irrespective of the permanent impairment assessment already
awarded in relation to her left knee injury, which met the same 10 per cent criterion under
the same Table in the Guide.
2 High Court of Australia Media Release.
3 The majority judgement was delivered by Hayne, Heydon, Crennan and Bell JJ. Keifel J did not agree with theirreasons.
4 Table 9.5 description of level of impairment in Part 2 (page 205) of the Guide.
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7. Prior to this decision by the High Court, determining authorities had considered that
subsequent injuries to a lower limb, or limbs, which did not result in an increase to the
degree of permanent impairment to the lower limb function under Table 9.5 in Part 2
of the Guide or to the lower extremity under Table 9.7 in Part 1 of the Guide could not
be compensated. This approach was consistent with the Full Federal Court decision in
Comcare v Van Grinsven (Van Grinsven). However, in the case ofFellowes, the High Court
overruled the decision made in Van Grinsven on the basis it was incompatible with Canuteand therefore wrongly decided.
Note:
Part 2 of the Guide deals with the assessment of defence-related claims for
permanent impairment made under the Act by members of the Defence Force in
relation to injuries sustained due to service rendered before 1 July 2004. The Military
Rehabilitation and Compensation Commission (MRCC) is the determining authority
under the Act.
Part 1 of the Guide deals with the assessment of permanent impairment claims made
under the Act by employees of premium paying agencies, the ACT Government
and licensees5. Comcare is the determining authority under the Act for premium
paying agencies and the ACT Government. Licensees or their claims agent are the
determining authority for employers who have been granted a licence under the Act.
Discussion
8. Part 1 of Comcares Guide is based on the American Medical Association Guides to the
Evaluation of Permanent Impairmentfth edition (AMA 5). Part 2 of Comcares Guide
is based on the American Medical Association Guides to the Evaluation of PermanentImpairmentsecond edition (AMA 2). The AMA Guides method of assessment applies a
whole person impairment concept. This means that:
most tables provide impairment ratings expressed as a percentage of whole person
impairment
a combined values chart enables the assessor to account for the effects of multiple
impairments, with a summary value that can not exceed 100 per cent of the whole
person.6
9. The stated policy intent7 of permanent impairment compensation under section 24 of the
Act was to apply a whole person approach to the assessment.
5 Employers who have been granted a licence to self-insure under the Act.
6 AMA5, page 9 (para 1.3 and 1.4).
7 In the Second Reading Speech introducing the Bill for the 1988 Act, the Minister said:
Under the existing Act (1971), lump sum payments are made on the basis of a table of maims, with the level ofpayment being determined having regard to the loss, or loss of the efcient use, of various parts of the body.That approach has been abandoned and the level of payments in future will be determined using a wholeperson approach. . .
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10. The decision made by the High Court in Canute8 cast doubt on whether the whole
person approach taken by the Guide was supported by the actual wording of the Act.
The Act provides the authority for and boundaries of the Guide. The High Court held
that the terms of subsection 24(5) required attention to the assessment of the degree of
permanent impairment resulting from an injury. Therefore, each separate injury suffered by
an employee (including sequela injuries) that results in a permanent impairment should be
assessed independently.
11. The effect of the Canute decision is that a sequela injury, that satises the denition of
injury in section 5A of the Act, is treated separately and therefore the person is able to
claim for any separate permanent impairment that results from the injury.
12. In the Fellowes decision, the High Court reiterated and expanded on the nding in
Canute. They made it clear that where an employee has two injuries resulting in separate
impairments to separate body parts, that are assessable under the same Table in the
Guide, the impairments must be assessed separately. They stated that the Guide does not
require a single rating to be given where two injuries yield the same degree of impairment
to two separate parts of the body. The Fellowes decision restated that the whole person
concept described in the Guide could not be applied in the event that each of a persons
compensable injuries results in impairment.
13. Further to this, impairment bears the meaning given by the denition in subsection 4(1)
of the Act. Therefore, impairment must be identied by the effect of the injury on the
employees loss, the loss of the use, or the damage or malfunction of any part of their
body, bodily system or function.
14. The following policy advice applies to all claims involving assessment of a degree of
permanent impairment.
Policy guidelines
15. The Fellowes decision applies to all permanent impairment determinations dated on or
after 23 September 2009. This was the date the High Court handed down its decision.
The important date is the date the determination is issued, not when the permanent
impairment claim was made. Decisions on claims issued since 23 September 2009 should
be consistent with the terms of this advice.
Determining authorities should take the following steps when deciding whether an
employee is entitled to compensation for a permanent impairment that results from a
compensable injury.
8 The Court said:
it is important to remember that recourse to the criteria and methodologies set out in the Guide is onlynecessary once the key statutory criterion of the occurrence of an injury (which resulted in permanentimpairment) has been fullled. The Guide is to be approached through the prism of each injury
the Act assumes that more than one injury may occur. Therefore it is not correct to say that s24(5) importsa whole person approach to the determination of the degree of permanent impairment. That ignores thecentrality of an injury to the scheme upon which the Comcare liability to compensate depends.
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16. Step 1Ensure the ollowing initial threshold requirements are satisfed
i) Liability for an injury is accepted
Claims for permanent impairment under section 24 or section 25 of the Act can only be
determined where, in accordance with section 14 of the Act, liability has been accepted for
an injury which includes a disease, or an aggravation of either.
If liability for the claimed injury has not been accepted under section 14 of the SRC Act
then the determining authority should:
make a determination under that section or assist the employee to submit a claim so
that a determination can be made
consider whether the injury is described differently to any previously accepted claim
that the employee has, or whether it is essentially the same injury.9
ii) The injury meets the denitions of impairment and permanent
Claims for permanent impairment must:
result from the particular compensable injury. Any impairment that results from a
different injury or non-compensable condition must be isolated (if possible)10
meet the meanings of:
o impairmentthe loss, the loss of use, or the damage or malfunction of:
any part of the body
any bodily system or function
any part of a bodily system or function.
o permanentlikely to continue indenitely.
These denitions of impairment and permanent can be found in subsection 4(1) of theAct. Subsection 24(2) lists the factors that a determining authority must have regard to in
determining whether an impairment has become permanent. The factors are:
the duration of the impairment
the likelihood of improvement in the employees condition
whether the employee has undertaken all reasonable rehabilitative treatment for the
impairment
any other relevant matters.
If a claim does not comply with the Acts interpretation of impairment and permanent, it
can not be accepted. A claimed permanent impairment can also not be accepted if it does
not result from the particular compensable injury.
If a permanent impairment does result from a compensable injury, proceed to Step 2.
9 See Abrahams v Comcare (2006) 93 ALD 147.
10 See subsections 24(1) and 24(5) of the SRC Act in the Full Federal Court decision in Comcare v Amorebieta [1996]FCA 1438 and Federal Court decisions in Martin v Australian Postal Corporation [1999] FCA 655 and Jordan vAustralian Postal Corporation [2007] FCA 2028.
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17. Step 2Assess the degree o permanent impairment
The degree of an employees permanent impairment must be assessed using Comcares
Guide.
Separate injuries resulting in separate impairments
If an employee suffers two or more compensable injuries that result in any permanent
impairment or impairments, the determining authority must make separate assessments of
the degree of permanent impairment resulting from each of the compensable injuries. This
is irrespective of whether the same table and criteria in the Guide apply to impairments
resulting from the different injuries, as in Fellowes.
Liability to pay compensation will only arise if the degree of permanent impairment
resulting from each compensable injury achieves the required 10 per cent threshold. The
only exception to this is hearing loss, or the loss of a nger, toe, or the sense of taste or
smell as mentioned in subsections 24(7A) and 24(8).
Consistent with Canute and Fellowes, above percentage threshold impairments resulting
from separate injuries are added. Any instructions in the Guide to combine or disregardrather than add these values must now be ignored.
Multiple impairments resulting from one injury
If an employee suffers one compensable injury that results in multiple permanent
impairments to different parts of their body, bodily systems or functions, irrelevant of
whether those assessed impairments are above or below the percentage threshold,
they must be combined. Combine them using the instructions in the Guide and its
Combined Values Chart in Appendix 1. The injured employee would be eligible to receive
compensation if the combined degree of their permanent impairment value is at least 10
per cent.
18. Step 3Consider any pre-existing permanent impairment
If an employees relevant body part or system was already affected by a permanent
impairment (from any condition), and it can be assessed using the Guide, it should be
isolated from the compensable injury.11
This means that the degree of permanent impairment arising from the compensable
injury in question has to be adjusted to take into account any pre-existing permanent
impairment. It should be noted that this approach is not inconsistent with Fellowes. In
Fellowes, when Ms. Fellowes suffered a compensable injury to her right knee, her right
knee was not affected by any pre-existing permanent impairment.
11 See subsections 24(1) and 24(5) of the Act in the Full Federal Court decision in Comcare v Amorebieta [1996] FCA1438 and Federal Court decisions in Martin v Australian Postal Corporation [1999] FCA 655 and Jordan v AustralianPostal Corporation [2007] FCA 2028.
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19. Step 4Consider non-economic loss (NEL)
An injured employee is entitled to receive a separate payment under section 27 of the Act
for each accepted injury that results in permanent impairment compensation under section
24 of the Act.
Section 27 of the Act provides where there is liability to pay compensation for a permanent
impairment, additional compensation for NEL is payable. NEL deals with the effects ofthe impairment on the employees life or lifestyle. Lifestyle effects are a measure of an
individuals mobility, enjoyment of, and participation in:
social relationships
recreation
leisure activities.
Where an employee has already received NEL compensation the determining authority will
need medical evidence to be satised that the employee is not being compensated twice
for the same effects on their lifestyle (part B of the NEL formula).
Where an interim payment for permanent impairment has been determined under section
25 of the Act, NEL compensation is not payable until the nal permanent impairment
compensation is determined.
Applying Fellowes to permanent impairment claims thathave been determined
Reconsideration of own motion
20. A determining authority has power under subsection 62(2) of the Act to reconsiderdecisions on its own motion. However, there is no requirement to do so for decisions
issued before 23 September 2009. Decisions made before this date are valid, as section 24
was applied in accordance with the judicial interpretation current at that time.
Requests for reconsideration
21. The determining authority or Administrative Appeals Tribunal (AAT) must apply the Act as
interpreted by the High Court in Fellowes if either of the following situations occur:
a determining authority receives a request for reconsideration of a decision issued
before 23 September 2009
a reconsideration decision becomes the subject of an application for review bythe AAT.
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Out of time requests for reconsideration
22. Out of time requests for reconsideration are those made more than 30 days after the
notice is given that a determination for permanent impairment liability is issued. If an out
of time request for reconsideration is made, it is at the determining authoritys discretion
to extend the time.
It is reasonable for determining authorities to extend the time if the original determinationrelied on Van Grinsven. It is also reasonable to extend the time if the request for
reconsideration involves an assessment of the degree of permanent impairment where
the principles in Fellowes apply. If a determining authority does not extend the time in
these circumstances, it could result in the employee making an application to the AAT for a
review of the decision12.
23. Alternatively, determining authorities can conduct a new assessment of the degree of
permanent impairment. Determining authorities are not, however, able to reconsider
decisions or undertake new assessments on decisions that have been made by the AAT or
the Federal Court.
Recalculating permanent impairment entitlementand interest
24. If the determining authority accepts an out of time request for reconsideration it may
determine that the employee is entitled to further permanent impairment compensation.
In this case, the statutory rate at the time of the reconsideration determination will apply
for the purposes of calculating the amount of further compensation payable. The rate that
applied when the original determination was made does not apply.
25. No interest is payable in respect of reconsideration or AAT review under subsection 26(4).
Policy review
26. Comcare is conducting a policy review of the Act and the Guide to ensure it delivers fair
and equitable compensation for permanent impairment and non-economic loss.
More information
27. For more information about this advice email Comcares SRC Policy Section [email protected] or call 1300 366 979.
General Manager
Claims Services Branch
12 March 2010
12 Employees are able to make an application to the AAT under section 64 of the Act.